And girls too. I'm sure Bowie meant that. I'm sure Jason Calacanis means it too. Despite the fact he blew off his appointment to chat with myself and the rest of the 2Web Crew tonight (scared? busy? who knows), his post recently about selling when you can has a bunch of valuable insights. If you've got a start-up on your hands, and you get relatively early offers to sell it to a bigger player, should you
a) sell when you can
b) hold out longer for a higher valuation?
As JC says,
The example I always look back on was Pointcast which had massive distribution and a reported half billion dollar offer from Newscorp--and turned it down. They soon got banned from corporate networks because they were clogging up bandwidth with their push technology (think RSS before RSS, but when companies had 5,000 people on one T1). The rest is history.
Frankly, if you're an entrepreneur the issue isn't just deal or not deal--it's how many times you swing the bat.
Holding on is ok, but holding on for too long is bad because you lose the opportunity to take another swing. During the dotcom boom/bust I watched folk hold on to their companies and extra 2-3 years and get nothing for it. They could have started another company from scratch in that amount of time and had another swing. Heck, I held on to my first company too long, and now folks tell me we didn't hold on to Weblogs, Inc. long enough! Frankly, for a first time entrepreneur there is no such thing as selling too early. And if you sell too late you'll feel that sting for a long time--trust me on this one. It's all a learning experience, and the important thing is you don't give up.
You miss 100% of shots you don't take.
I've never been in that situation, but I imagine it can be hard to make those calls. Do I sell today and watch what I built perhaps increase in valuation 100x? Or do I hold on longer and perhaps watch my valuation decrease to zero in six months? Every entrepreneur thinks their particular business is going to go all the way - if you didn't you wouldn't be in the business. And if the market didn't agree with you, they wouldn't be offering to buy. I was hoping to talk to Jason more about this tonight on our podcast but, as I said, he didn't show. Maybe next time.